Nixon Proposes Health Insurance Subsidy For Low-Wage Workers

Missouri Gov. Jay Nixon is proposing that the state use federal health dollars to subsidize health insurance for low-wage workers.

Under a program he is calling Missouri Health Works, Nixon wants the state pay a portion of employers’ health insurance costs for their employees who make below 138 percent of the poverty level, or $27,310 annually for a family of three.

The program would be open to businesses with fewer than 150 employees.

Under the Affordable Care Act, businesses with more than 50 employees must provide affordable health insurance coverage to their employees or pay a penalty. Missouri Health Works would pay for an estimated 60 percent of the cost of the health premium for eligible employees.

The governor presented the idea Monday during a visit to the Cape Girardeau Chamber of Commerce.

“Small businesses in Missouri are getting squeezed between sky-high health insurance costs and new requirements under the ACA,” Nixon said in a news release. “Missouri Health Works is an example of the kind of smart, business-friendly reform that is possible if we move forward and bring Missourians’ tax dollars home.”

Nixon’s plan would use additional federal Medicaid funds that would come to the state if it expanded Medicaid eligibility for families earning 138 percent of the poverty level.

The governor’s office said Nixon’s proposal is similar to those in other states, including Arkansas, Iowa, Kentucky, Maryland, Minnesota, Nevada, New Mexico, Oklahoma and Oregon.

Current level

Families can make no more than 18 percent of the federal poverty level to qualify for Medicaid in Missouri — which means, for example, a single mother of two can make no more than about $3,500 a year for assistance, according to the Missouri Medicaid Coalition.

Under the Affordable Care Act, the federal government has pledged to pick up 100 percent of the costs for newly eligible Medicaid participants (in years 2014–2016) in states that raise eligibility to 138 percent of the poverty level. The federal reimbursement would gradually fall to 90 percent.

Nixon has advocated for the Medicaid expansion for more than a year. But the GOP-controlled General Assembly has thus far declined to authorize the expansion.

This year’s session of the General Assembly ends May 16.

The governor’s office cited an analysis by the Missouri Economic Research and Information Center, which said that expanding and reforming Medicaid would create 23,868 jobs, $9.9 billion in new wages and $14.6 billion in new Gross State Product from 2015 to 2022.

According to the report, Medicaid expansion would also generate $402 million in new state general revenue from 2015 to 2022.

According to The Associated Press, Republican leaders in the state House of Representatives immediately criticized Nixon’s idea.

“If he were serious about this he wouldn’t wait until there’s three weeks left in session, and he would maybe try to engage members of the General Assembly before spending state moneys on the airplane flying down to Cape Girardeau to talk about it,” House Majority Leader John Diehl, a Republican from Town and Country, told the AP.